Cost to serve: zooming in customer profitability at Nike

Maria Eugenia Martelli

Research output: ThesisPd Eng Thesis

22 Citations (Scopus)
3 Downloads (Pure)

Abstract

This report presents the outcome of the Logistics Design Project carried out for Nike Inc. The goal of this project is to design a cost model that provides visibility on the profitability of each relevant segment of the matrix, by establishing the cost correlation between products, processes, categories, and customers. A thorough analysis of the processes involved in Nike's supply chain is developed in this report. Also, a description of the processes and activities performed within each flow is presented, together with a detailed depiction of the supply chain cost structure. To understand the importance of improving the precision and accuracy of the cost information, a one-off exercise is performed for a particular country (UK), and for a specific key customer (JJB). The results of this exercise have shown how this particular customer CPU is positioned in comparison with the averages CPU's of the country and the region. For the development of this model, the Activity-based costing (ABC) principles are used. The report concludes that Cost to Serve is a key enabler to achieve an effective customer management by identifying opportunity areas to increase profitability. Further recommendations regarding the implementation of the model are finally presented.
Original languageEnglish
Supervisors/Advisors
  • van der Veeken, Henk, Supervisor
  • van Woensel, Tom, Supervisor
  • Manescalchi, Aleria, External supervisor, External person
  • Coolen, S., External supervisor, External person
  • Schildermans, Geert, External supervisor, External person
Award date1 Jan 2008
Place of PublicationEindhoven
Publisher
Print ISBNs978-90-444-0777-8
Publication statusPublished - 2008

Bibliographical note

Eindverslag

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